Board Matters

FACT: CONFLICTS

Summary:

  • The conflicts of interests alleged by the Requisitionists are baseless as there are no “conflicts” nor “interests”
  • Not a single Board member has any interest in any contract with GSIS
  • We are all volunteers, bound together only by a common fondness for our school
  • Unclear what a resolution to declare “void” the March 17 EGM, at which no resolution was passed, could possibly accomplish
  1. In its Supporting Statements, the Requisitionists make various accusations of conflicts of interest at the Board, none of which appear to have any basis whatsoever:

Chairmanship

  1. In support of their resolution to declare the EGM of March 17, 2020 “void”, the Requisitionists assert that the Board’s chairperson, Mr. Müksch, had a conflict of interest when the Swiss Government made its five demands in a letter on November 20, 2019. Their reasoning goes that, since one of the demands was a mandatory 2-year rotation of the Board Chairperson, Mr. Müksch was somehow conflicted because this would prevent him from being re-elected as Chairperson.
  2. This argument is flawed in all aspects:
  • First, Mr. Müksch was only in his first year as Chairperson, and thus would only be prevented from re-election in March 2021;
  • Second, the Swiss demands, including the mandatory rotation of the Chairperson, were in fact put up for a vote at the EGM in March of this year, before even Mr. Müksch’s first chance at re-election; and
  • Third, there is no “interest” in being Chairperson because the position carries absolutely no personal benefit, only additional obligations and time commitment
  1. It appears that the Requisitionists are confusing commercial dealings with the GSIS Association with holding a volunteer position at GSIS. The fact is that Mr. Müksch has no commercial interest whatsoever in any contract, material or not, with GSIS.

LGT Account

  1. Another rumor being propagated is that Mr. Müksch would have a conflict with the account the GSIS Foundation has with LGT, a Liechtenstein bank. In 2018, GSIS opened a second investment account to diversify its exposure to our main bank UBS.  At the request of the Board, Mr. Müksch, who is an employee of LGT, made an introduction to LGT and then withdrew from the process.  LGT agreed to accept GSIS as a “pro bono” account with zero annual fees and a fee of only US$150 per transaction.  In the current fiscal year, total fees to LGT are HK$7,000 versus HK$300,000 to UBS.
  2. Müksch has no involvement at LGT with the account, has no signing authority at GSIS for the LGT account, recuses himself from Board decisions relating to the LGT account, has reported his directorship of GSIS with the SFC, Hong Kong’s financial regulator and has complied with LGT’s internal compliance procedures. Needless to say, Mr. Müksch has not gained any benefit from the HK$7,000 in fees paid to LGT to date.  However, GSIS has benefited: the LGT account has already produced HK$4.6 million in investment returns for GSIS.

Mr. Mandel’s relation to Mr. de Jong

  1. It is also rumored that Mr. Mandel is related to Mr. de Jong. Sadly, and as much as Mr. de Jong likes to ignore it, this rumor is true.  Mandel is married to Mr. de Jong’s cousin.  However, strange is the implication that Mr. de Jong would have a declarable conflict simply by being related to another Board member.  What if directors happen to be friends, or colleagues? (except where a subordinate / supervisor relationship may exist)

In Conclusion

  1. Most importantly, not a single director on the current Board has any interest in any contract with the GSIS Association or the GSIS Foundation, material or not, directly or indirectly, other than having children enrolled at the school. The same cannot be said for earlier Boards going back many years.
  2. The Board members spend a very significant amount of their personal time on GSIS-related matters for absolutely no pay or personal benefit and, sometimes, at substantial personal expense. We are all volunteers who share little more than an interest in making our school an even better place for our students and staff and make GSIS a more inclusive community where all members, regardless of nationality, ethnicity and means are treated with equal respect.